Stephen Byers, Secretary of State for local government, is to demand an explanation from the local authorities that have failed to collect a total of five hundred million pounds in council tax.It comes after latest figures show English local authorities had collected 11.89 billion pounds in council taxes for 2000/2001 by the end of March. This represents 95.8% of the 12.41 billion pounds due, and is a slight improvement on performance in the year before.

The Institute of Fiscal Studies (IFS) has tried to set out why – despite a full term of a Labour Government promising to help those in poverty – income inequality remains higher than when it first came to power.The analysis follows publication by the Department of Work and Pensions of new information about low-income households.

Report by National Audit OfficeThe report reviews the working of the self assessment system introduced by the Inland Revenue five years ago. Although recognizing recent changes to the Revenue’s approach to intelligence work, the report expresses concern at the tax that is not collected. It is difficult to estimate the size of the hidden economy and the tax gap, but in 1999/00 some 22 million pounds additional tax was collected. Most of this came from ‘ghosts’ who are self employed people or businesses not registered for tax and moonlighters who are registered for tax as an employee but also work on the side, without declaring the income. The lack of targets for collecting tax from the hidden economy was also criticized. Measures taken to reduce the tax loss include setting up specialist teams to improve the focus of the work and increasing the scope and scale of data-matching to identify non-compliance.